If The Gas Price Spike Act is passed, it would levy taxes up to 100% on any "excessive" oil company profits.

The mainstream media is absolutely frothing at the mouth about the latest energy news to come out about the United States.

Lower oil prices aren't really good news. Moreover, low oil prices don't even mean low gasoline prices - as you may have noticed lately.

Fuel efficiency is a good thing, right? I don't see why not.

But the prevailing myth is that fuel efficiency results in the use of LESS fuel.

It's just not true.

According to economist Jeff Rubin, greater fuel efficiency has not changed the amount of fuel Americans consume by one drop.

In 2002, the United States Geological Survey (USGS), America's authority on natural gas, (among other stuff you need to dig up, drill, mine or quarry), released a report saying that the Marcellus Shale of New York and Pennsylvania then had 2 trillion cubic feet of natural gas.

Then in July of 2011, the Department of Energy (DOE) upgraded that estimate to more than 400 trillion cubic feet.

But yesterday, the USGS revised its initial estimate up to 84 trillion feet - or down to 84 trillion feet, depending on which estimate you were looking at.

Natural gas eventually will take a more prominent role in the lives of the world energy consumer.

In the mean time, we’re still in the infancy of natural gas adoption. And that means there’s plenty of room for growth.

Before I get into some of the more interesting aspects of the IEA’s Natural Gas Report (which you can click here to read for yourself), I’d like to quickly tell you about an incredible opportunity in European natural gas investing that you’re not likely to hear about anywhere else.

My colleague Tyler Laundon is one of the best analysts I’ve ever worked with, and he’s done a truly excellent job at finding the next big natural gas discovery and the companies that are taking advantage of it. You can read all about this discovery by clicking here now.

Okay, now for one of the more interesting, and potentially profitable data points from the IEA report.

The International Energy Agency (IEA) recently released a report titled “Are We Entering a Golden Age of Gas?”

Fortunately, you can actually read this report for yourself. I’ve included the link to the report at the bottom of this email. (Warning: the report is nearly 130 pages long.)

I haven’t read the entire report myself, but I thought I’d go over two of the most interesting themes presented.

For one, the IEA projects that natural gas could rival oil usage on a Metric Tonnes of Oil Equivalence (MTOE) by 2035.

Take a look at this chart that plots world demand for different energy fuels:

Twelve years ago, at the infancy of the current bull market in gold, a small group of folks started buying up gold and gold securities.

They didn’t ring a bell or tell their friends. They probably felt a little foolish doing so. They might have felt a little crazy.

Gold had been in a two-decade bear market.

Today, there’s a commodity that’s commonly used, extremely cheap and arguably in a 50 or 60 year bear market.

It’s a commodity that people probably don’t even think about as very investment-worthy – but it’s completely vital to the modern world. Significantly more important than gold even.

And I’m going to tell you how to invest in three companies involved in this commodity today that should see strong gains in the coming years, as well as solid dividends in the meantime.

Is buying now too early? I can’t say for sure. But what I can say is that a bull market in this commodity is as inevitable as the tides. Perhaps literally so…

Oil is the biggest single cost input into many businesses, goods, commodities and products. We know it, but it bears repeating.

So, if you’re looking for a reason for commodity prices to rise in price, you probably don’t have to look any further than the single biggest input.

Right now, oil prices are scratching around the $110 a barrel range – a price unthinkably high even three and a half years ago. Laughably high. Ridiculous. Who could afford gasoline over $4 a gallon?

The Financial Times recently published an astonishing story that just isn’t getting enough attention. I like to think of the FT as the newspaper The Wall Street Journal would like to be if it wasn’t trying so hard to impress everyone with fancy Weekend sections and glossy magazine forays.

If you want to look distinguished, you might read the WSJ in public. But if you want to be informed, you’ll also read the FT in private.

Ask 100 people on the street to define inflation, and 99 of them will tell you it’s when prices increase.

Of course the Federal Government’s Bureau of Labor and Statistics will tell you the same thing:

“Inflation can be defined as the overall general upward price movement of goods and services in an economy.”

Notice that the BLS doesn’t say that inflation IS defined as such and such. They say it can be defined as such and such.

As an ardent student of the English language and turn of phrase, it speaks volumes about the Federal Government and the BLS and how they really view inflation when they use such imprecise language on their official website.

Inflation certainly CAN BE defined as a general rise in the price of goods and services – but it shouldn’t be!

If you’re Ben Bernanke, you add Federal Reserve Notes (FRNs) into the mix. And the poorer the country’s engine runs, the more FRN additive you need to mix in.

The logic being, that if a small amount of FRNs help stimulate the engine to run a little bit better, a large amount of FRNs will stimulate the engine to run much better.

And just as with leaded gasoline, the consequences of this additive can be worse than the supposed upsides.

The sad thing is, this method of juicing an economy, I thought, was pretty soundly disproved around the same time that the United States began cutting back on lead additive gasoline.

Didn’t we learn the lessons of fiscal and monetary recklessness in the mid to late 1970s?

It's not news to most Americans, but CNN columnist Paul R. La Monica today wrote that oil prices are too high.

La Monica stopped just short of blaming speculators, but did make it clear that many analysts and oil CEOs believe that Saudi Arabia has plenty of excess capacity to more than make up for any problems with Libyan supply.

He also doubted that the uprisings in the Middle East-North Africa (NEMA) region will spread to Saudi Arabia or Iran.

But energy analysts like Gregor Macdonald noted the opposite likelihood – that Saudi Arabia and other oil producers in OPEC and beyond may not have the ability, both logistically and actually to increase production.

Macdonald wrote last week:

In the last six months or so, we've seen copper up 36%, cotton up 100%, wheat up 24% and soybeans up 42%. And it's hard to miss the price gains at the pump.

Gasoline is now at a national average of $3.36 a gallon, with places like San Francisco seeing some areas reporting just under $4.00 a gallon. (For comparison, that national average was $1.90 just two years ago.)

High unemployment and still falling housing prices are offsetting commodity price gains in popular measures of inflation, like the CPI.

As one BlackRock (NYSE:BLK) money manager told Bloomberg:

"These commodity price increases are staggering...Each commodity is different, but there is a supply issue for oil. There has been real economic demand for these commodities since the economy began recovering."

Right now, we have crystal clear proof on the topic of the wages of reserve currency devaluation. We know, because we’re seeing those wages everyday.

Reserve currency devaluation results in higher commodity prices.

I don’t even think that Ben Bernanke himself would dispute the above statement privately.

Over the course of Bernanke’s tenure, we’ve heard some fancy banker speak. We’ve heard about increasing liquidity and backstopping the financial system and easing quantitatively.

But today, everything that you would expect to happen when a currency is devalued is happening – and more.

Before I get to the “and more” portion, we don’t have to look very far or hard at all to find the wages of currency devaluation.

I'm writing to you this morning from a hotel in Washington DC where I'm attending an energy conference.

It's being hosted by the Association for the Study of Peak Oil and Gas (ASPO). I'm joined by two of my Wyatt Investment Research colleagues, Brit Ryle (a researcher, analyst and 10 year veteran of the investment research business) as well as energy analyst Gregor Macdonald, editor of Energy World Profits and all-around expert on the topic.

I've been urging readers to take a look at Gregor's research because he really knows his stuff, and because you need to be aware of what's coming down the pike. I sincerely believe energy is THE issue that supersedes all others.

For instance, we know that the Federal Government is broke, and that unemployment is high, and that we have crumbling infrastructure and a housing market in shambles. We have many problems to address - but fixing these issues won't be worth a jar of spit if we don't have access to affordable energy.

The next payment will go out to shareholders of record as of September 30^th, with the actual check going out on October 15^th. So you still have a few days to pick up shares if you're interested in grabbing the dividend.

As I said, it's a monthly dividend, so if you want to wait for more of a dip, you won't miss out on the income by waiting a few weeks. But with these monthly players, I'd recommend averaging in each month so you collect dividends all the way along. And reinvest those dividends to enjoy the miracle of compounding interest.

I'm still bullish on this stock. The reasons are the same they were six months ago - the downside for a company like this one is somewhat limited when natural gas prices are this low.

For some industries - like shipping - oil prices are one of the biggest cost inputs. Other industries, like...oh say, online publishing, are somewhat less dependent on oil.

But every sector of the economy does have an oil cost input.

That's why I'm extremely worried about oil prices, and where we all know they're going.

For a small taste of what's in store, Charles Maxwell, senior energy analyst for Weeden & Co. - a man with 50 years experience in the field - recently predicted that we'll see $150/barrel oil within the next five years, and $300 oil by 2020.

I'm a bit less optimistic - because I think we could easily break the $150 barrier in the next 18 months. It was only 24 months ago that we saw similar prices - so it's not out of the question.

There's a hidden tug-of-war happening right this minute. On one side stands a massive and hugely popular contestant, with millions of fans and groupies.

And this contestant gets bigger every day, every moment, even. He's closely acquainted with President Obama. He's best buds with Nobel Laureate economist and New York Times columnist Paul Krugman. He and John Maynard Keynes go way back.

You might know him as 'debt' or maybe 'deficit' if you want to get formal about it.

He's currently facing an opponent that no one really pays too much attention to. Sure, they'll pay some token lip service to debt's opponent - but c'mon; who is kidding who? Debt is WAY bigger and more robust than this puny shrimp.

It's tempting to look at the price of a barrel of oil, or the price of a gallon of gasoline as a way to evaluate when oil companies are cheap.

But there's little correlation between oil price and profitability, value or future share price for most of the companies in the oil sector. There are a few exceptions that I'll talk about in a minute...

Not to go into too much detail, but most oil companies, large and small, hedge their production in the futures markets. When you hedge your production, it has the effect of evening out the highs and lows in the market.

You can easily see the effect of hedging by looking at two charts stacked on top of each other: the percentage performance of a price of a barrel of oil plotted with the percentage performance of the AMEX oil index (AMEX: ^XOI).

The AMEX oil index compiles the price movement of the 13 largest publicly traded oil companies. And no, you can't buy it - unfortunately it's not a traded index.

There's a lot of buzz in the oil markets these days, and while we've been kind of lulled into complacency with oil in the $75-$80/barrel range, this situation won't last forever.

It might not even last for long, and right now there's a unique opportunity to buy a highly specialized mid-cap oil company. I'll get to this company in a bit...

In the meantime, the United States currently has one of the largest stockpiles of oil it's ever had, with over 1.13 billion barrels of petroleum inventory - or about 60 days worth of supply at current rates of consumption.

The news immediately caused oil futures to dip - briefly below $75 a barrel.

That'sabout the average price for 2010, year to date:

We might quietly scoff at the Toyota (NYSE: TM) Prius drivers - after all, the car only gets slightly better mileage than the average car in its class, so it's not all that special as far as environmentalism goes.

But don't scoff too hard, because it just might be that we'll all be driving hybrid cars in the not-so distant future.

You might be thinking that we simply don't have a model of fuel-source change for automobiles - so we really don't know what the future will hold - and whether our cars will be powered by natural gas, lithium-ion, or even solar power - or perhaps some combination.

And you're right - there's basically no model for automobile fuel conversion.

But there is a very robust model for home heating conversion.

Today there are at least as many heating technologies as there are fuel types, but 100 years ago, most people used coal and wood.

In yesterday's edition, I talked about an oil services company that benefits from higher oil prices.

But higher oil prices don't just benefit oil companies. In fact, higher oil prices can sometimes hurt oil companies - because higher oil prices frequently reflect higher production costs - so while a company might get more dollars per barrel, each barrel costs it more to get out of the ground. And even though the effect is usually small, higher prices typically result in a somewhat diminished demand.

According to Enerdata, an independent energy consulting company, gasoline consumption dropped 4.5% in North America during the record high oil prices of 2008. That's certainly a significant drop, but as you're probably painfully aware, oil prices more than doubled from the previous year:

For months, former George Soros partner and famed resource investor Jim Rogers has been trumpeting natural gas and silver investments. I've been doing the same in the Resource Prospector newsletter since launching back in March. If you've been sitting on the sidelines, there is still time to take action before these investments run away from you.

Jim Rogerswrote the book on resource investing: Hot Commodities. I urge anyone interested in the topic to go out and get yourself a copy. Right now there are 29 new and 17 used copies of this book on Amazon.

When Jim Rogers said to buy natural gas and silver three months ago, I was already urging you to do the same. Natural gas prices have since risen by more than 25% - and some of the stocks in that sector have done far better.

I've also been pounding the silver drum. Silver is now up almost 10%, but I still think there's much more upside. You can read more about silver's potential in this past issue of the Resource Prospector by clicking here.

Rogers is still bullish on silver, but he recently mentioned another cheap commodity. It's something that Americans use everyday in great quantities - over 160 pounds per person every year.

I hope you had a pleasant weekend and were able to get outside and enjoy the weather if it was amenable in your locale. We experienced some unseasonably warm weather here in Vermont, and I tried to stay outside as long as possible. I even fired up my new Weber charcoal grill, a birthday present from my wife. I grilled some sirloin steak, some mushrooms on a kebab and even some corn.

I’ve heard conflicting views on whether to grill the corn in its husk, or to grill it “naked.” This time I opted for naked, grilling it on the cob over indirect heat for about 10 minutes, and the corn had some nice caramelized flavors. I seasoned it ahead of time with salt, pepper and a little olive oil. If you have a bbq corn recipe (or any bbq recipe for that matter) please send it my way at editorial@resourceprospector.com.

Today’s article isn’t all grill recipes, though. I’ve wanted to write about corn, the commodity, for quite some time. It’s just tough to pull myself away from alluring topics like gold and energy. And I should apologize, because agriculture isn’t something that’s very exciting to read about – not like precious metals or oil. But commodities like corn, soybeans, wheat, pork bellies, cattle, sugar and coffee all fall into the realm of my purview.

I’ve long advocated that responsible citizen-investors should eat their own cooking.  If you go to McDonalds (NYSE: MCD) three days a week, it only makes sense to be a McDonalds shareholder.  If your lifestyle choices are reflected in your portfolio, then you’re already in a good position to understand the fundamentals of the companies you own.  Conversely, if you’re buying companies that you don’t understand, then you’re setting yourself up for failure.

And there are other benefits.  If you’re a consumer of, say, crude oil, why not invest in companies that reap the reward of your diligent consumption of gasoline, heating oil, and other petroleum products?

According to AAA, the average car uses 533 gallons of gasoline every year.  At $3 a gallon that means it costs about $1,600 a year to run the average car for a year.

So the question is: how can you get $1,600 a year from oil companies?

Before I answer that question, I’d like to revisit my thesis for owning commodity stocks in general, as well as owning energy stocks in specific.

As I said yesterday, I don’t like telling you to buy something when it’s at or above its nominal highs. So, I won’t. With gold now selling for over $1235 an ounce – above its all time previous highs of $1224, there’s no reason to ring the bell right now. If you were among the lucky few to buy gold and gold stocks in the past, then I wouldn’t sell either – but I wouldn’t advise building or adding to a position in gold right this hot second.

By the way, I’d like to hear from you – where do you think gold is headed? What percentage of your portfolio is in gold? Drop me a line at editorial@resourceprospector.com

I believe gold will likely move higher, but buying at the highest highs in hopes that it will immediately move higher is just not good investment sense.

Instead, I’d like to draw your attention to a commodity that’s not making headlines today. It’s not on CNBC, or gracing the front page of the Wall Street Journal. Once a story is well-covered by the mainstream media, it’s not really my job, or in your best interest, for me to continue shining a light on it.

I hope this 6^th of May is finding you in good spirits, and that you’re not experiencing the downside of tequila over-enjoyment. Nothing against Mexican independence, but a foreign national holiday, partly concocted for American consumption by shrewd liquor companies, is not a good enough excuse for me to tie one on in the middle of the week.

And this time of year in Vermont, it’s just too nice out to want to risk ruining the next day with a tequila and sugar borne hangover. (By the way, if you know of a good hangover cure, please send it to me at editorial@resourceprospector.com)

Too much of a good thing is almost always no fun. Likewise, a bumper crop of sugar from Brazil and India is causing some severe consequences for prices.

The average American uses 156 pounds of sugar every year. At current price levels of about 15 cents a pound, that comes to only $23 and change.

I set a timer on my laptop calendar to go off today, because I had to remind myself of important news from the Energy Information Administration coming out in exactly one week.

If you read my April 6 issue of the Resource Prospector a few weeks ago, you know what I’m talking about.

From that issue:

“On April 30, the EIA is scheduled to release its natural-gas monthly report for February. In the report, the agency will use the new methods to estimate gas supply and revise its January numbers.”

I believe these new methods will reveal significantly lower natural gas reserves than the marketplace currently expects. And more importantly, I believe this news will move natural gas prices much higher in the near future.

And while I’m content with my analysis, sometimes it’s nice to get some support from another contrarian viewpoint.

I hear lots of people saying that while commodities have had a nice run, the bull market in “stuff” is nearing its end. That begs the question: how long can a commodity bull market last?

It’s a valid and important question.

I’m a commodity investor, but not for sentimental reasons. As much as I value gold as a hedge against inflation, or oil’s ability to make my car go vroom – I invest in commodities for fundamental reasons – largely because I believe they are still cheap and undervalued from a historical perspective.

So, back to the question at hand. How long can a commodity run last?

Last Thursday, April 1, I talked about how inexpensive natural gas was getting. If you bought natural gas last week, it was the equivalent of buying gasoline for 48 cents a gallon.  Prices had to go up. 

It’s good to know I wasn’t alone in my proclamation, as both the Daily Profit editor, Ian Wyatt and Trademaster Daily Stock Alerts editor Jason Cimpl noticed the same trend. Ian is my boss and CEO of Wyatt Research – as well as one of the best fundamental analysts I’ve ever met or worked with. Jason is a wunderkind technical analyst and is frequently one step ahead of the market. They don’t always agree, just because they have different time-lines and different investment philosophies - so when they do agree, it’s a good idea to take notice.

And in Friday trading, gas prices bounced off their 6 months lows.

You probably remember when gasoline cost 48 cents a gallon. It was in 1974 – not so long ago, really.

Inflation adjusted for 2009 dollars, gas was never that cheap though. It bottomed in 1999 at about $1.40.

So I realize it sounds too good to be true to suggest that you can buy gas for 48 cents today. With most of us paying close to $3/gallon it’s just a ridiculous claim.

And of course, there is a catch. Consider it a small April Fools day hoax.

The Pantry, Inc. (Nasdaq: PTRY), a convenience store chain operator in the southeastern United States, said this morning that it expects its fourth quarter and full fiscal year earnings to be below previous expectations due to lower than anticipated gasoline gross margins.

Based on preliminary data, the small cap said it expects its retail gasoline gross margin for the fourth fiscal quarter to be between $0.10 and $0.105 per gallon, bringing its fiscal year 2007 retail gasoline margin to approximately $0.109 per gallon, substantially below the previously expected $0.115 per gallon.

Accordingly, The Pantry expects earnings per share for the fourth quarter and the full fiscal year to also be below previous expectations.

The company also provided guidance for fiscal 2008. Given current near-record oil prices and volatile gas margins, The Pantry is broadening its target range for retail gasoline margins in fiscal 2008 to between $0.11 and $0.13 per gallon. Excluding potential acquisitions, the company said it expects merchandise sales to grow about 10% to approximately $1.7 billion and retail gasoline gallons to grow about 11% to approximately 2.3 billion gallons.

Shares of The Pantry (PTRY) slid $1.68, or 5.86%, to $27.00 just ahead of the opening.

Susser Holdings Corp. (Nasdaq: SUSS) wants to take a Texas-sized bite out a growing and vulnerable market. What with re-branding, expanding, adding restaurants and hunting for acquisitions, the Corpus Christi-based convenience store and gas distributor is positioning for a feast.

Reasons for the hullabaloo are clear. Susser Holdings operates mainly in the bounding economy of south Texas, as well as north to Oklahoma, and in a developing, fragmented business. The U.S. convenience store industry is expected to increase to $559.9 billion in 2009, from $474.2 billion in 2005, for a compound annual growth of 4.2%. Small operators with 50 or fewer stores made up about 74% of all convenience stores run by retailers in 2005, according to the company’s annual report.

Susser has a history of exploiting the patchwork convenience store business, having completed nine acquisitions in the last 17 years, adding 326 retail stores and 234 motor fuel dealers. When current CEO Sam Susser joined the company in 1988, it ran five stores and had revenues of $8.4 million. Susser now has 325 stores and revenues of $1.9 billion. The company went public in October 2006, pricing 6.5 million shares at $16.50. Shares were trading Wednesday at $16.30, giving it a market capitalization of about $274 million.

To strengthen its identity, profitability and flexibility, Susser has dropped its deal with Circle K stores and has re-branded its own stores with the Stripes name. It also in 2006 agreed to a long-term contract with Valero fuel, as opposed to CITGO; Susser is the largest non-refining motor fuel distributor by gallons in Texas. Those transformations are virtually complete, with the changes coming at a whirlwind pace. Next course: Adding 18 to 22 new large format stores in 2007, each with a Laredo Taco Restaurant, and putting more of these restaurants into existing stores.

The restaurant, a high margin business, complements the strong Texas Hispanic demographic. While just offering breakfast and lunch now, Susser is trying out dinner service at select restaurants. There are more than 150 Laredo Tacos, and the company wants to put 30 to 45 more in current stores, as well as into all new outlets.